Optimism Retro Funding – Voting Design Evaluation

[akrtws]

TLDR; The future of Optimism Retro Funding is built on its past! Optimism Badgeholders and GovNERDs, don’t miss your chance to discover:

1) Brand-new insights from comparing voting designs across Retro Funding Rounds 1-4
2) A new evaluation framework for assessing future voting rules
3) Data-driven proposals for improved voting designs and performance metrics

Register and take part at the workshop on Monday, September 23, from 17:00-18:00 UTC here!

Optimism Retro Funding is one of the most visionary endeavors in the crypto space. Instead of funding based on future potential, it retroactively compensates work that has proven valuable for the Optimism Ecosystem and offers a sustainable model for individuals to receive rewards. Round by round, the decision on reward distribution is decided by a vote in the Optimism Citizens House.

The GovXS team was chosen to evaluate voting designs for Optimism Retro Funding through the Foundation Mission Request: Evaluating Voting Design Tradeoffs for Retro Funding.
The objective: Improve Optimism governance accessibility and grow the Optimism Collective’s understanding of optimal voting designs to encourage diverse, informed, and values-aligned voting behavior.
Delivering on this objective, GovXS developed a new voting evaluation framework drawing from Social Choice Theory. We apply theoretical analysis and agent-based simulations to assess past Retro Funding voting designs across six dimensions:

1. Resistance to malicious behavior and collusion: Measure to what extent a malicious voter (or a group of coordinated malicious voters) can impact voting outcomes
2. Incentive compatibility: Prove or disprove that the voting design is incentive compatible (”every participant can achieve their own best outcome by acting according to their true preferences”)
3. Simplicity for Voters & Expected Outcome: Measure if voters can easily understand how the voting design works and how to best achieve their goals
4. Majority & Diversity: Measure if results represent preference of majority or diversity of voters
5. Incentives Alignment: Measure how well the incentives of voters and the Optimism Collective are aligned
6. Alignment with Ground Truth in Impact = Profit: Measure how well the voting design supports finding the objective truth in “impact = profit”.

The GovXS Voting Evaluation Framework is now available to evaluate voting designs in Retro Funding rounds. Its metrics enable straightforward comparisons, helping select the best-fit designs for each round’s scope while ensuring strong and reliable voting outcomes. Optimism Badgeholders and GovNERDS will be among the first to access and explore the GovXS Voting Evaluation Framework by registering to attend our workshop on Monday, September 23, 2024, at 5pm UTC.

In this session, the GovXS team will walk you through the key components of the framework, and showcase the results reviewing past voting designs from Rounds 1–4. This workshop will guide you through GovXS’ evaluation and recommendations to improve future rounds’ voting designs and performance metrics.

This event is exclusively for Badgeholders, GovNERDS, guest voters and members of the Optimism Collective. Meet the GovXS researchers Nimrod Talmon, PhD, Angela Kreitenweis, Eyal Briman, and Muhammad Idrees, and learn and discuss together!

GovXS is a research initiative under Token Engineering Academy, which aims to propel the success of crypto protocols with cutting-edge research in the new, crypto-native discipline of token engineering.

See you there!

[akrtws]

Update:

We’ve just published a first article with evaluation results.
“Making Optimism Retro Funding Strategyproof”.

• We reviewed all voting rules in Optimism Retro Funding Round 1–4
• We found that none of the voting rules applied in Round 1–4 is strategyproof
• Strategyproofness means that voters can achieve their best outcome only by voting according to their true preferences

This is problematic, because
a) It encourages voters not to vote truthfully, an issue in any voting system.
b) Optimism Retro Funding relies on learnings from analyzing voting data and voter preferences. If this data is skewed, wrong conclusions will be taken - for example insights on expert guest voters in round 5.
c) If the voting rule provides voters with wrong incentives, the results are distorted, and Optimism Retro Funding can’t get any closer to the objective truth in “Impact = Profit”.

Solution:

In the article, we propose two voting rule variants to address this challenge and make Retro Funding strategyproof in Round 5 and onwards.
Read more here,
and take part at the workshop on Monday, September 23, 2024, at 5pm UTC .

[akrtws]

Update:

We’ve recorded the Badgeholder Workshop
“Evaluating Voting Design Tradeoffs for Retro Funding” where we introduce the evaluation framework and first findings, like making Optimism Retro Funding strategyproof.

You can watch it here!

[akrtws]

Update:

We’re participating in OP Retro Funding Round 6 with our work.
After winning the Foundation Mission grant #188, we went beyond the original scope and delivered:

• Voting Design Mathematical Specification:
  Deriving the formal specification of the exact voting rules applied in Optimism’s Retro Funding Rounds 1–4 (R1–4) to allow for rigorous, axiomatic analysis

• Voting Design Evaluation Framework:
  Deriving a 360° evaluation framework based on Optimism Retro Funding objectives

• Voting Design Evaluation Metrics:
  Developing metrics to rigorously verify voting designs against Retro Funding objectives, applying theoretical, axiomatic analysis and agent-based simulations

• Testing and Verification of Optimism’s R1–4 Voting Rules:
  Verifying if the R1–4 voting rules satisfy Incentive Compatibility so that voters can not improve their results by lying about their preferences (known as “strategyproofness” in social choice theory)

• Detection of Major Flaws in Optimism Retro Funding:
  We found major flaws in the Optimism Retro Funding voting designs (none of the R1–4 voting designs satisfy strategyproofness!)

• Provided 2 Strategyproof Solutions:
  GovXS proposed two alternative voting designs to solve strategyproofness and meet Optimism Retro Funding’s design goals

Here’s how the Foundation Mission Request #188 framed:

• Baseline grant amount: 9,000 OP
• Ideally, the mission directly informs the voting design for upcoming retro funding rounds. In this case, grantees are encouraged to apply for an additional allocation of tokens in the August 2024 governance-themed Retro Funding Round 6.

We’re excited to continue supporting Retro Funding with governance analytics & innovative voting designs!

[akrtws]

Hi everyone!

We keep on publishing results of our voting design evaluation!

We just published a deep dive into the strengths and vulnerabilities of different voting designs in Optimism Retro Funding: Resistance to Malicious Behavior.

With over 60M OP tokens distributed so far, there’s a lot at stake—and we wanted to understand how each voting rule stacks up against potential attacks.

In the article, we break down which designs hold up best:

• Maximum Extractable Value – Assessing the worst case scenario per voting rule.
• Voter Extractable Value (VEV) – The maximum funding a malicious actor could extract for their favorite project
• Robustness – Each rule’s sensitivity to minor vote changes.
• Cost of Bribery – Effort needed for an attacker to change the funding outcome.
• Cost of Control – Impact of adding or removing voters
• Group-Strategyproofness – Resistance to collusion among voters.

We also discuss new protective measures like secret voting and random voter assignments, which are currently being tested in Rounds 5-6.

Check out the article if you’re interested in how we’re working to make Retro Funding even more resilient!

Securing Retro Funding Against Malicious Behavior

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Update:

The GovXS team has published the fourth and final article of our Retro Funding Voting Design Evaluation.

In this article, we discuss Impact=Profit: Finding the Ground Truth in Funding Allocation

It includes:

• An introduction to the Evaluation Framework we developed
• All evaluation results summary in a table for easy overview
• Why “Incentive Alignment” is important for Retro Funding, and how we measure it
• Voter incentives and voter skin in the game
• Alignment with Ground Truth and how we measure it
• How monitoring “Alignment with Ground Truth” can become a tool to measure the healthy development of Retro Funding
• We close with a Roadmap for developing Retro Funding to show how improvements are interconnected.

Learn more:

Impact=Profit: Finding the Ground Truth in Funding Allocation

Enjoy reading!
If you have any questions on our evaluation or are interested in learning more about our open-source simulator, feel free to reach out!